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Now, if all the banks, etc. will require folks to have the proper qualifications with enough down payment %, without too much other debt, with reasonable steady employment, etc. etc. and rates are low maybe we can begin to get out of the mess and get some real movement on real estate sales going again vs. the not real "flipping" of property for a short term profit.

If you click the column that says "APR-Calculate", it will include the APR's for all the listed rates. The APR for the 4.25 rate loan is around 4.5 (still pretty good!), and the lowest cost loan is 5.375 (apr =5.379) with fees of only $162.00, but it's a sneaky looking chart because they don't detail the points vs. the other lender fees.

If you click the column that says "APR-Calculate", it will include the APR's for all the listed rates. The APR for the 4.25 rate loan is around 4.5 (still pretty good!), and the lowest cost loan is 5.375 (apr =5.379) with fees of only $162.00, but it's a sneaky looking chart because they don't detail the points vs. the other lender fees.

The APR is not a good metric because it spreads the points and fees over the life of the loan, i.e. 30 years while the typical life of the loan is less than 7 years. If you spread the points and fees over 7 years or the expected life of the loan, the APR would be much higher if the points and fees are high.

If you click the column that says "APR-Calculate", it will include the APR's for all the listed rates. The APR for the 4.25 rate loan is around 4.5 (still pretty good!), and the lowest cost loan is 5.375 (apr =5.379) with fees of only $162.00, but it's a sneaky looking chart because they don't detail the points vs. the other lender fees.

Yeah, I answered that way without going to the web site. I was just pointing out the importance of figuring an APR since the OP just shouted about the rate. Once I went there I saw that feature.

As always it's very tricky and these sites are notorious for baiting with the lowest terms that almost nobody will actually qualify for. The devil's in the details.

The APR is not a good metric because it spreads the points and fees over the life of the loan, i.e. 30 years while the typical life of the loan is less than 7 years. If you spread the points and fees over 7 years or the expected life of the loan, the APR would be much higher if the points and fees are high.

Very good point that people need to take into account. You can talk yourself into it by figuring a 30 yr duration but if you sell in 5 years the math is quite different.

It's also why it's difficult to assess a refil without knowing the specific individual's circumstances.

For me, I'm staying for the duration so the straight APR calculation is valid.

Very good point that people need to take into account. You can talk yourself into it by figuring a 30 yr duration but if you sell in 5 years the math is quite different.

It's also why it's difficult to assess a refil without knowing the specific individual's circumstances.

I agree. IMO the best way to approach re-financing is to use an online calculator to determine if the package makes sense financially. If your calculated pay back (in months) is less than the time-frame that you are likely to sell the house - you will be ahead. This is the best calculator that I have found:

I agree. IMO the best way to approach re-financing is to use an online calculator to determine if the package makes sense financially. If your calculated pay back (in months) is less than the time-frame that you are likely to sell the house - you will be ahead. This is the best calculator that I have found:

I am in the process of re-financing and my calculated pay-back is in 12 months. My loan provider quoted the same pay-back period so either the numbers are accurate or they use the same calculator?!

On the other hand it depends on how you define your pay back. Most people will refi into the same term loan they had and take advantage of a lower payment. Then they calculate how long it will take to recoup costs based on that lower payment.

For me it was a different calculus. I had 17.5 years left on a 30 yr loan and refi'd into a 15 yr, dropping my interest rate from 6 to 4.25. My payment stayed about the same, but I pay it off 2.5 yrs earlier with about a 20K interest savings (it's actually worth more if you count the opportunity gain for my cash flow in that 2.5 yrs). So it doesn't actually pay off for me for 15 yrs but it's still definitely worth doing. Sometimes you have to take the long view.

On the other hand it depends on how you define your pay back. Most people will refi into the same term loan they had and take advantage of a lower payment. Then they calculate how long it will take to recoup costs based on that lower payment.

Yeah, that's my situation - a very straightforward calculation in my case. My refi swapped a standard 30-year fixed to another at a much lower interest rate.

There is also the added benefit of securing a low interest rate if you intend to carry the mortgage into retirement. Generating 4.25% of income from your investment portfolio to cover the mortgage interest is a lot easier than having to generate >6%. Especially in today’s markets!

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